Sustainability Report

No Accidents Today Succeed Through Collaboration Find Valuable Solutions It’s Our Business

2013

Clever Resourceful Solutions Sustainability Report 2013 ABOUT THIS REPORT

About this Report

This is Orica’s 10th annual Sustainability Report, for the 12 months ending 30 September 2013. Information and statistics in this Report cover sites owned and operated by Orica Limited subsidiaries or controlled by Orica Limited subsidiaries. Information and data reflects the entire 12 month period to 30 September 2013 or the status as at 30 September 2013, unless otherwise stated. All monetary amounts in the Report are in Australian dollars (AUD) unless otherwise stated. This Report has been prepared in accordance with the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines (Version 3.1). The GRI ‘B Level’ application check is included on page 35 of the Report. Information relating to Orica’s sustainability approach and sustainability performance is also communicated through the Company’s website www.orica.com, Annual General Meeting (and webcast), Annual Report and disclosures to the Australian Securities Exchange (ASX). Previous year’s Sustainability Reports and Annual Reports can be downloaded from www.orica.com

CONTENTS Message from the Managing Director and CEO 1 Safety 18 Vision and values 2 Occupational Health 20 Product and Services 3 Environment 21 Recognition 4 Community 25 Sustainability Performance Scorecard 5 Product Stewardship 28 Locations and Operations 6 Governance 32 Sustainable Gains Through Higher Energy Bulk Explosives 8 Economic Contribution 33 Mineral Carbonation Pilot Plant 9 About the Report 2013 35 Engagement and Key Sustainability Issues 10 Global Reporting Initiative (GRI) Application Level Check 35 People 12 GRI Summary Index 36 Safety, Health, Environment and Community Overview 16

ORICA LIMITED ABN 24 004 145 868 Message from the Managing Director and CEO

Orica is committed to delivering Clever Resourceful Solutions – for the benefit of customers, shareholders, employees, communities and the environment. The Company derives the majority of its revenue from the provision of differentiated products, services and solutions to the mining and infrastructure related industries. By utilising low-cost, multi-source and flexible supply chains Orica is able to meet the needs of customers and improve sustainability. Orica continues to invest in new and innovative solutions that will enhance value for customers by increasing productivity, improving environmental and social outcomes and reducing costs. University of Newcastle and the GreenMag Group, At Botany, Australia, Orica responded to 2013 Operating Performance will establish the pilot plant at the University. community concerns about the potential Orica’s annual earnings declined in 2013 The technology transforms captured carbon for mercury contamination offsite from past against the backdrop of weaker than expected dioxide emissions into solid carbonate for operations by funding an independent study global economic conditions and the impact safe disposal or use in “green” building overseen by the New South Wales Government. associated with the optimisation of the Ground materials. If the technology can be successfully The study will assess the need for any additional Support business which is now fully integrated commercialised, it has the potential to contribute independent testing being conducted using with Mining Services. to a meaningful reduction in both Orica’s and scientifically rigorous methods. Global manufactured ammonium nitrate customers’ CO emissions. 2 People volumes in 2013 were at record levels. In addition, Such innovation continues to make Orica the Orica has a diverse workforce of over 14,500 Brownsburg, Canada, achieved record production supplier of choice and will contribute to improving people from more than 130 nationalities to of electronic detonators (up 10 percent on the the productivity and sustainability of Orica and support its global customer base. To ensure prior year) and sodium cyanide production of its customers in more than 100 countries employees have an understanding of Orica’s at Yarwun, Australia, reached record levels. around the world. vision, values, strategy and the core competencies The Bontang, Indonesia, Ammonium Nitrate required to achieve the Company’s objectives, plant successfully reached nameplate capacity. Safety, Health, Environment a global training program, Orica Seven Pillars, The development of the 330 ktpa Burrup, and Community commenced. Completed by 6,750 employees Australia, Ammonium Nitrate plant, in joint The year saw the initiation of changes across the in 2013, it will reach 85 percent of all employees venture with Yara (45 percent) and Apache important areas of Safety, Health, Environment by April 2014. (10 percent), remains on budget and schedule, and Community. These enhancements are for commissioning in mid to late 2015. The designed to provide a consistent approach Human Resources support systems were plant will mainly supply the growing iron ore across Orica which will help improve operations improved during the year, with the first stage markets in the Pilbara. and Orica’s social licence to operate. of a project to migrate all employees onto one global information system. The project will Sustainability Progress Improvements in performance at major improve the way Orica organises, recruits, In conjunction with Orica’s latest electronic manufacturing plants were delivered through rewards and develops its workforce. initiating systems, a number of sophisticated plant and process improvement initiatives. blasting techniques were implemented to improve Although the injury severity index improved and Outlook the productivity of customers’ mining operations. there were no fatalities in 2013, the All Worker Through its strategy of providing differentiated Chemical energy is around 25 times more Recordable Case Rate increased. There is more products, services and solutions that will enhance effective than mechanical energy for the breaking work to do to achieve “No Accidents Today”. value for mining and infrastructure customers, Orica is well positioned to take advantage of of rock. This puts Orica in a position to establish Remediation activities for historical operations the attractive long-term industry fundamentals blasting solutions that enable greenhouse were undertaken at a number of Orica sites of mining. gas improvements via a reduction of energy around the globe. Increased priority is also consumed in the comminution (crushing and being placed on managing operations to Orica’s actions in the past year have resulted in a grinding) of rock during mineral processing. prevent and mitigate the creation of future strengthening of the Company’s foundations as it Installation of nitrous oxide abatement technology environmental issues. continues to improve sustainability performance. at some of the Company’s biggest manufacturing In 2013, progress has been made to strengthen sites has reduced Orica’s annual greenhouse gas Orica’s relationship with its host communities Ian Smith emissions by the equivalent of taking more than and other stakeholders. To support improved Managing Director and CEO 250,000 vehicles off the road. community engagement, stakeholder plans Orica has joined the Australian and New South have been developed and implemented at a Wales governments to support a world-first number of manufacturing sites in Australia and research pilot project. Mineral Carbonation Pty New Zealand. A rollout of such an approach Ltd (MCi), a joint venture between Orica, the across the globe is scheduled for 2014.

1 Sustainability Report 2013 VISION AND VALUES

Vision

Orica is the largest provider of commercial explosives and blasting systems to the mining and infrastructure markets, the global leader in the provision of ground support for mining and tunnelling and a leading supplier of sodium cyanide to the gold industry. Orica also Clever supplies general chemicals across a diverse range of markets, including agriculture, building and construction, food and beverage, pharmaceutical and personal care, pulp and paper, plastics, and water treatment industries, including the provision of clean drinking water. Resourceful An Australian company with a global footprint, Orica has a diverse workforce of over 14,500 people, with operations in more than 50 countries and customers in more than 100. Orica’s vision is to provide Clever Resourceful Solutions to its customers around the world. Solutions This vision is delivered by an organisation focused on customer needs and collaboration, operational excellence, innovation and the creation of value for customers and shareholders alike.

Values

No Accidents Today Succeed Through Find Valuable Solutions It’s Our Business We are committed to the safety Collaboration We look for solutions that add We act with integrity and of each other, our customers and We work together as one business value to our business and our honesty. We are accountable the community. Our aspiration across many geographies and customers. We are committed for our actions and make is no harm and zero accidents. embrace the diversity of our to continually improve, innovate decisions in line with our No accidents of any kind – team. We respect and value the and find better ways of doing economic, social and personal, plant or environmental. participation of everyone. things. We listen to our environmental responsibilities. We ask “How can we have no We build trusted partnerships with customers’ needs and invest We set goals and deliver accidents today?” If we have our stakeholders and we will only in research and technology to results. We communicate our no accidents today succeed if they feel as though they develop new ideas. strategy so we can all participate and tomorrow, we can have succeeded with us. and find opportunities to grow do it forever. our business.

2 Products and Services

Mining Services General Chemicals Blasting Ground Support Agriculture Bulk explosives Steel and composite ground support systems Building and construction Packaged explosives Injection and high volume chemical ground Food and beverage Electronic Blasting Systems support systems Flavours and fragrances Initiating Systems Ground support services Personal care Seismic systems Mine ventilation control systems Pulp and paper Blasting Services Emergency and recovery services support Plastics Delivery and magazine services Specialised mine service and repair products Water treatment and Watercare Surface mining, underground, quarry Mining Chemicals and construction – design, loading and firing services Sodium cyanide Technical services – training, auditing, Sparge - cyanide delivery and blast modelling and blast improvement dissolutions systems Blast measurement services PRO service - technical in-use mineral Blasting environmental effects processing reagent support and risk management services Specialty mining chemicals Performance services – Flotation reagents blasting to specification Emulsifiers

Orica delivers Clever Resourceful Solutions for the many challenges facing its customers through ground breaking technology and a significant Meeting Customer research and development focus. Customer needs are met directly through a personalised Needs combination of products, services and technology along with advanced design solutions. Customer needs are varied but generally include; improving productivity, reducing environmental impact, and operating safely and efficiently with reliability and speed. Orica tailors the offering to meet customer specific needs. Orica uses its flexible supply chain to ensure security of supply of mining inputs through its own manufacturing plants, capital-efficient joint ventures and supply alliances. This portfolio is strategically located across Australia Pacific; Asia; Europe, Middle East and Africa (EMEA); Latin America; and North America, enabling valuable supply chain capabilities for customers. Through this capability Orica has earned trusted partner status from its customers around the world. At Orica we are committed to the safe handling and use of products and services to ensure the protection of people, the environment and our customers’ reputations. We believe that our responsible corporate practices will not only enhance our financial performance but the communities in which we work.

3 Sustainability Report 2013 RECOGNITION

Awards and Recognition Recognition A number of Orica’s programs, products and services have been recognised as leading practice in their field during the past year. These include:

Best Places to Work for Recent Grads Award (Experience, the USA’s largest university- endorsed career network) 2013 Orica Recognition Awards Awarded to Orica USA In 2013, an internal awards program was launched to recognise outstanding team and individual achievements that demonstrate the Orica values and deliver results for the Telstra ITSM Project of the Year Award business and customers. Five different award categories will be recognised – one for each (IT Service Management Forum Australia) of Orica’s values, and a separate Team Of The Year award. Awards will be presented in Awarded to Orica for its Globalisation of February 2014, at the Senior Leaders Forum dinner in Perth, Australia. IT Service Delivery project

Good Design Award (Good Design Australia) CS Awarded to Orica for the LOADPlus™ Controller

Pinnacle Award for Chemical Transportation Orica-GreenEDGE Safety (Union Pacific Railroad) Awarded to Orica USA for the best practice Orica’s relationship with the GreenEDGE in action. Orica-GreenEDGE celebrated in hazardous material transit professional cycling team brings together its 100th victory during the year and the two world-class organisations that share an ORICA-AIS team finished the 2013 season Australian heritage, embrace diversity and as the Union Cycliste Internationale’s (UCI) Indian National Technology Award for “Succeed Through Collaboration”. number one womens team in the world. Physical Sciences Including Engineering (Presented by Indian Minister of Science Orica’s naming rights sponsorship of Other highlights from this year was and Technology) the mens team and co-sponsorship of Simon Gerrans and Daryl Impey wearing Awarded to Indian Explosives Limited, the womens team aligns with its talent the coveted yellow jersey or “maillot jaune” a wholly owned subsidiary of Orica, for management philosophy by fostering young and Orica-GreenEDGE winning the team the development of a non-nitro glycerine sporting talent on the global stage, just time trial during the Tour de France. explosive system as Orica fosters young professional talent through its global graduate program. Recognition for responsible conduct The Orica-GreenEDGE mens team and by the Chemical Industry Association ORICA-AIS womens team are recording of Chile (ASIQUIM) impressive results and providing concrete Presented to Orica Chile for three years of examples of innovation and teamwork safe behaviour at the Santiago Manufacturing facility

Leader of the Branch 2013 (Republic of Kazakhstan) Awarded to JV Minova Kazakhstan LLP for its inclusion in the top 50 best small enterprises in the Republic of Kazakhstan in 2013

Will Spensley Memorial Award for Innovation (Australian Association of Graduate Employers) Awarded to Orica based on the work of its Graduate Sustainability Committee

4 Sustainability Performance Scorecard 2013

0.69 0.63 0.54 0.47 0.47 No Accidents Today

09 10 11 12 13

0 in 2013 0.54 in 2013 3.37 in 2013

ZERO FATALITIES ALL WORKER RECORDABLE CASE RATE INJURY SEVERITY INDEX 0 fatalities 0.54 all worker recordable case rate 3.37 injurity severity index Decrease from 1 in 2012 Increase from 0.47 in 2012 Decrease from 3.85 in 2012 Target – 0 2015 Target – 0.50 2015 Target – 2.17

0.87

0.71

0.55 0.54 0.50

09 10 11 12 13

111 in 2013 0.50 tCO2-e/t in 2013 1.92 kL/t in 2013

HIGH POTENTIAL INCIDENTS GREENHOUSE GAS EMISSION INTENSITY POTABLE WATER CONSUMPTION INTENSITY

111 high potential incidents 0.50 tCO2-e/tonne of production 1.92 kL/tonne of production

Decrease from 148 incidents in 2012 Decrease from 0.54 tCO2-e/t in 2012 Increase from 1.91 kL/t in 2012 1 2015 Target – 0.36 tCO2-e/t of production 2015 Target – 1.06 kL/t of production

14 in 2013 41 in 2013 18% in 2013

PRODUCT INCIDENTS DISTRIBUTION INCIDENTS WOMEN IN SENIOR MANAGEMENT 14 Category 2+ product incidents 41 Category 2+ distribution incidents 18% representation of women in senior Decrease from 23 in 2012 Increase from 33 incidents in 2012 management ranks 2015 Target – 11 2015 Target – 11 Increase from 15.9% in 2012

45% in 2013 15 sites in 2013 98.5% in 2013

SEVEN PILLARS TRAINING COMMUNITY HEALTH 45% of employees worldwide trained in Orica’s 15 stakeholder plans active 98.5% of scheduled health assessments vision, values and core competencies 2014 Target – Stakeholder plans active completed against plan of 95% 2014 Target – 85% trained at 40 sites 2015 Target – >98% of scheduled annual health assessments completed

1 Data 2010 to 2013, including 2010 baseline data updated Achieved target Significant progress made Limited progress made Not achieved to reflect revised N2O emissions calculation methodology. 5 Sustainability Report 2013 LOCATIONS AND OPERATIONS An Australian Company with a Global Footprint

Headquartered in Melbourne, Orica’s Global Manufacturing Presence Australia, Orica is listed on Ammonium Nitrate Initiating Systems Morón (Venezuela) the Australian Securities Bacong (Philippines) Ankara (Turkey) Nanling (China) Exchange (ASX). Bontang (Indonesia) Antofagasta (Chile) Panaguyrishte (Bulgaria) Burrup (Australia) under construction Brownsburg (Canada) Tappen (Canada) Carseland (Canada) Cape Town (South Africa) Ust-Kamenogorsk $6.9B Geneva (USA) – 50% joint venture Chambishi (Zambia) (Kazakhstan) Kooragang Island (Australia) Cuatro Cienegas (Mexico) Weihai (China) Full year sales revenue in 2013 Yarwun (Australia) Dubai (UAE) Fexar (Colombia) Gomia (India) $7.4B Gyttorp (Sweden) Helidon (Australia) Total capitalisation as at 30 September 2013 Karella (Russia) La Portada (Chile) Limay (Philippines) Lorena (Brazil) Minden (USA)

6 Bulk/Packaged Explosives Ground Support Services Mackay (Australia) Chemicals Aljustrel (Portugal) Alrode (South Africa) Makeyevka (Ukraine) Adelaide (Australia) Antofagasta (Chile) Arndell Park (Australia) Marion (USA) Botany (Australia) Charlestown (USA) Barnsley (UK) Novoselidova (Ukraine) Deer Park (Australia) Chambishi (Zambia) Beijing (China) Nowra (Australia) Heybridge (Australia) Chatelet (Belgium) Bluefield (USA) Polkowice (Poland) Laverton (Australia) Cuatro Cienegas (Mexico) Bottrop (Germany) Proctorville (USA) Morrinsville (New Zealand) Gomia (India) Bowerston (USA) Rustenburg (South Africa) Morwell (Australia) Gyttorp (Sweden) Chesterfield (UK) Santiago (Chile) Noble Park (Australia) Hallowell (USA) Clearfield (USA) Severouralsk (Russia) Perth (Australia) Itatiaiucu (Brazil) Essen (Germany) Siemianowice Slaskie (Poland) Port Kembla (Australia) Kalgoorlie (Australia) Georgetown (USA) Smithfield (Australia) Wyong (Australia) Lalahan (Turkey) Grand Junction (USA) South Point (USA) Yarwun (Australia) Limay (Philippines) Grundy (USA) Stoney Creek (USA) Lorena (Brazil) Hyderabad (India) Tianjin (China) Manicaragua (Cuba) Isando (South Africa) Truskolasy (Poland) Morón (Venezuela) Karaganda (Kazakhstan) Welshpool (Australia) Siji (UAE) Kemerovo (Russia) Sirgala (Estonia) Leninsk Kuznetskiy (Russia) Ust-Kamenogorsk (Kazakhstan) Weihai (China) Wuergendorf (Germany)

7 Sustainability Report 2013 CASE STUDY

CS

Sustainable Gains Through Higher Energy Bulk Explosives

Orica, a global leader in commercial explosives location and energy sources used, this can and blasting systems for the mining and also result in significant greenhouse gas quarrying industries, continues to develop emission savings. new products and services to meet customer At one trial operation, a 12 megawatt (MW) needs for improved productivity and reduced ore grinding mill was able to be operated environmental impact. at 11 MW due to the use of high energy This year, Orica successfully trialed two new blasting, but at the same time, the tonnage high energy bulk explosives – Vistis™ and processed through the milling circuit Vistan™. Developed to improve post blast increased by seven percent. fragmentation, early results at customer trial When combined with the precision sites in Canada, Chile and Australia have been timing of Orica’s Electronic Blasting very encouraging. Systems and Orica’s suite of services Ore crushing and grinding (‘comminution’) and technology, Vistis™ and Vistan™ is usually the most energy intensive step in have the potential to deliver significant mining, so optimising fragmentation is critical value to customer operations. to improving ore processing efficiency. For Orica is a proud sponsor of the Coalition for mining operations where the ore is very hard, Eco-Efficient Comminution (CEEC) and holds smaller particles entering the comminution the CEEC’s Sponsors’ Seal of Distinction, stage can result in increased mill throughput which recognises Orica’s commitment to and reduced energy consumption per tonne improve energy and cost outcomes for mines of ore processed. Depending on the mine in the substantive area of comminution.

8 CS Mineral Carbonation Pilot Plant

If successful on a commercial scale, this

technology could provide safe CO2 capture for disposal or use in “green” building and construction materials. Mineral carbonation replicates and accelerates the earth’s own natural carbon sink

mechanism by combining CO2 with low-grade minerals to create inert carbonates – similar to common baking soda. Orica scientists have been involved in researching the technology for over six years.

The pilot plant will use CO2 captured at Orica’s Kooragang Island manufacturing facility, in Newcastle, New South Wales. Speaking at its launch, Orica Managing Orica’s commitment to research and In 2013, MCi received matched funding Director and CEO Ian Smith said the development and sustainable business from Orica and both the Australian and technology holds a lot of promise as practices have come together in support New South Wales Governments to establish it is “already proven in the laboratory, of a potentially revolutionary technology a world-first carbon dioxide (CO2) mineral the technology has great benefits over in the field of carbon storage. carbonation research pilot plant at the geo-sequestration because it permanently University of Newcastle. The funding Mineral Carbonation International Pty Ltd (MCi) transforms the CO2 and does not simply will enable research and trials of a new is a joint venture between Orica, the University store it underground”. technology to transform captured CO of Newcastle and the GreenMag Group. 2 emissions into carbonate rock.

Transforming CO2 into products for building

CO2

Potential use Industry in construction

Mineral carbonation plant Inert carbonates

Minerals

Mine Disposal

Backfill into mine

9 Sustainability Report 2013 KEY SUSTAINABILITY ISSUES

Engagement and Key Sustainability Issues Orica’s approach to sustainability is guided by our vision of Clever Resourceful Solutions and underpinning values of: No Accidents Today, Succeed Through Collaboration, Find Valuable Solutions and It’s Our Business. The Company is committed to the safe handling and use of its products and services. Orica believes that responsible corporate practices will not only enhance the Company’s performance but also benefit our customers, the environment and the communities in which we work.

Stakeholder Concerns and Interests Engagement

Employees and contractors Career and development Direct engagement at Company work locations; Orica intranet; regular opportunities, remuneration, internal written and/or face to face communications about the changes performance management and that could impact employees; the Orica Update bi-monthly newsletter senior leadership. published in 13 languages; Seven Pillars workshops; internal workshops and conferences.

Customers Cost, performance of product, Direct engagement; the Mining Services Global Feedback Database, reliability of supply, sustainability a formal mechanism for capturing feedback and complaints impacts of products and services. relating to products and services; customer technical workshops; and presentations at industry forums and conferences.

Suppliers and business Cost, performance of product, Direct engagement; supplier questionnaires; regular meetings with joint partners reliability of supply, sustainability venture partners. impacts of products and services.

Shareholders and the Company performance and ASX announcements, Annual General Meeting; half-year and end-of-year investment community governance. results presentations and webcasts; investor road show meetings; direct shareholder engagement including calls and meetings, with feedback to the Board where appropriate. Shareholders are able to write to the Chairman of the Board. Orica’s sustainability performance is disclosed on the Orica website, the annual Sustainability Report, in the Dow Jones Sustainability Index (Materials sector), FTSE4Good Index and the Carbon Disclosure Project.

Community and Employment opportunities, Site-specific programs for community contact, information sharing local residents local operational impacts such and community investment. Employment opportunities via the Orica as noise, odour, emissions and website. Direct engagement with individuals. Systems to register, contamination. investigate and promptly respond to community complaints.

Government Regulatory compliance, research Direct engagement with government and regulatory agencies in and development, local countries where we operate. Written submissions regarding regulatory community issues. impact via professional groups or industry associations.

10 Stakeholder Engagement Orica’s key sustainability challenges and Renew manufacturing reliability and Orica understands that effective engagement opportunities can be assessed across the integrity and communication are fundamental to Company’s focus areas: • Maintaining our social licence to operate – meeting current, and adapting to changes gaining the trust and support of our key Refine the customer value proposition in, community and social expectations and stakeholders: employees, customers, business • Innovation and rapid commercialisation of government regulations. partners, shareholders, governments, and the ideas – ensuring that we can continue to communities where the Company operates. innovate and collaborate to commercialise • Reducing greenhouse gases and improving The Company seeks to tailor engagement new ideas and provide customer driven energy efficiency – looking at ways to reduce to each stakeholder group. solutions and services. our carbon footprint to meet regulatory and community responses to climate change. Assessing Key Sustainability Issues • Product stewardship – ensuring that we minimise Safety, Health, Environmental Extend the Mining Services offering This Report aims to discuss Orica’s significant and Community risks related to the use of • Using energy more efficiently – being able to economic, environmental and social impacts. Orica products. provide products that reduce our customer’s Topics reported, and Global Reporting production costs, energy use intensity and Develop people capability and competence Initiative (GRI) indicators used, have been carbon footprint. prioritised through an assessment of the • Attracting and retaining talent – having the • Reducing environmental or community Company’s material sustainability challenges right people with the right skills to deliver impact – being able to provide customers and opportunities. The assessment seeks to the Orica strategy and provide a high level with advanced blasting service solutions to consider whether these material issues would of service to our customers. minimise vibration, fume or other potential substantively influence the views and decisions • Diversity in the workforce – ensuring we environmental or community impacts from of key stakeholders and users of the Report. can support and grow our global business blasting activities. Feedback from the following engagement by leveraging the diversity of talent in our activities was considered when identifying workforce. Secure low cost and capital efficient supply key issues for inclusion in this Report: • Meeting customer expectations – ensuring Drive common systems and processes reliability of supply for our customers. • Regular consultation with host communities • Corporate governance – being able to work and partners; consistently across different geographic • Access to limited resources – ensuring adequate access to and secure supply of key • Annual General Meeting and contact with locations by having common standards, raw materials such as natural gas and water. the investment community; reporting systems and assurance processes. • Materials stewardship – ensuring consistent • Interactions with regulatory bodies, host Focus on performance metrics and targets standards as we move to increasing sourcing government, special interest groups and • No Accidents Today – preventing safety, via capital efficient joint ventures or secure industry programs; health or environmental incidents at Orica alliances and relationships with supply sites, or off-site impacts to the community • Surveys of key stakeholder groups; and partners. or environment from the manufacture, • Key Orica stakeholder relationship holders, distribution or use of our products. This Report highlights Orica’s efforts to who were requested to provide feedback address the above key sustainability issues. from their stakeholders around Orica’s • Ensuring challenging metrics and targets that sustainability reporting. drive and reflect our improvement efforts.

11 Sustainability Report 2013 PEOPLE

A skilled, productive KEY FACTS and diverse workforce is Over 75% of employees are based outside critical to Orica’s business of Australia and New Zealand performance. Orica’s People Growing workforce in Africa, supporting Strategy, together with customers’ growth its policies, training and 13 official business languages development programs Over 4,000 Mining Services’ technicians and and supporting systems, operators support customers worldwide Nearly 10% of employees in scientific and guides how the company engineering roles attracts, develops and Orica’s managers and supervisors have retains talented people an average of 9 years experience in while ensuring alignment the Company to business strategy.

People Employees by Region and Gender

Global Team, Global Skills Globally, Orica employs 14,915 An Australian company with a global footprint, employees, 82% male, 18% female Over 6,750 Orica’s over 14,500 strong workforce represents employees worldwide trained in Orica’s vision, 130 nationalities working across operating Africa 670 employees, values and core competencies as part of the sites in more than 50 countries and customer 83% male, 17% female Seven Pillars program service sites in more than 100 countries. Much Asia 2,647 employees, of Orica’s growth has come from geographic 86% male, 14% female expansion, resulting in a rich diversity of Australia Pacific 3,594 employees, 150 participants languages, culture, background and experience. 78% male, 22% female in Orica’s award-winning Graduate During 2013, Orica hired approximately 1,000 Europe and Middle East 2,468 employees, Development Program new employees. Global turnover of employees 77% male, 23% female was around 13 percent, reflecting operational LATAM 2,826 employees, Orica’s global HR Information System, changes and integration of Ground Support 88% male, 12% female into Mining Services. “PeopleNet”, rolled out to all employees North America 2,710 employees, Orica serves and works alongside customers 81% male, 19% female worldwide. Employees’ skills and experience in blasting, logistics and manufacturing are supported by world-leading research and project development, and global support functions.

12 CS Orica Seven Pillars

Seven Pillars is a program about Orica’s “The Seven Pillars program was strategy, priorities and key organisational competencies, presented by Orica people a great opportunity to get to Building to Orica people. know Orica better, to share everyone’s experiences from More than 380 employees have been Competence trained to facilitate the program, which is management to employees.” run in 15 languages all around the world. Participant – Wahana Mine, Indonesia Through Investing Seven Pillars is delivered via a two-day face-to-face, workshop-based program. “The exercises were very in Training and Two Orica employees facilitate each session. good, it was great to get an Where possible, employees from a mix of opportunity to express your Development the Company’s functional areas attend each program to encourage interaction and opinion and discuss as Orica invests in people for the long-term, a group. The session covered providing training in Safety, Health, Environment discussion. Each program is opened and and Community (SHEC), technical and closed by a senior leader, giving employees a lot of different perspectives management skills to employees from induction the opportunity to provide input and put and made the group feel they to the Company and throughout their questions directly to senior leaders. are an important part employment. In 2013, Orica invested over three In 2013, 330 programs were conducted of this company.” percent of payroll in training and development. covering 6,750 employees. More than half Participant – Orebro, Sweden To ensure all employees have an understanding of these sessions were held in operational/ of Orica’s vision, values, strategy and the core regional sites ranging from Kalgoorlie, competencies required to achieve Company Australia to Antofagasta, Chile. These “An inside look at the company objectives, a company-wide training program sessions involved frontline employees that I have just started with. called Seven Pillars has been developed. The and their supervisors. I am very impressed with two-day training program was completed by The program is on track to reach 85 percent what I see here and I clearly 6,750 employees in 2013 and is on track to of employees by April 2014. Engagement understand the strategy going reach 85 percent of all employees by April 2014. with the program was demonstrated by forward.” Development of online induction and the positive feedback received. operational core competency training was Participant – Mt Manuganui, New Zealand commenced in 2013 for rollout in 2014, to ensure a globally consistent approach to training new employees. Orica has a multi award-winning global Graduate Development Program with 150 participating graduates across Australia Pacific, Asia, Latin America and North America in 2013. The program will expand to Africa in January 2014. All employees in managerial/supervisory, professional, technical and administrative roles participate in the Company’s annual performance management process, incorporating individual career development planning as part of the mid-year review process. The majority of these employees also participate in a Short Term Incentive plan, in which additional financial incentives are awarded to employees based on Company and individual performance. Orica provides support to employees who leave the Company due to restructuring or reorganisation. Job vacancies within Orica are listed on the Company Intranet where appropriate.

13 Sustainability Report 2013 PEOPLE Continued

Protecting Employees’ Workplace Rights

Orica values all employees and the contributions they make and is committed to equal opportunity.

Orica is committed to fostering open and inclusive workplaces that are based on recognised workplace human rights and international human rights standards. Orica prohibits the use of all forms of forced labour and adheres to minimum age provisions of applicable laws and regulations. In addition, the Company prohibits the hiring of individuals under 18 years of age for positions in which hazardous work is required. In 2013, the The basis for recruitment, hiring, placement, Employees are encouraged to raise issues with Company did not receive any reports of forced training, compensation and advancement at their direct manager. Orica’s integrity hotline, or compulsory child labour. Orica are qualifications, performance, skills the Speak Up Line, enables employees to report and experience. breaches of the Code of Conduct anonymously. Orica values all employees and the contributions If a report is made, it is escalated as appropriate Upon offer of employment, all new staff are they make and is committed to equal for investigation and action. opportunity. Orica seeks to maintain workplaces required to sign Orica’s Code of Conduct and that are free from discrimination or physical SHEC Charter which commits them to engaging During the reporting period, there were three or verbal harassment on the basis of race, sex, in safe and environmentally responsible work allegations of discrimination made to the Speak colour, national or social origin, religion, age, practices. Orica’s SHEC Model Procedures require Up Line by employees. These were investigated disability, sexual orientation, political opinion or that all site SHEC committees have employee and two were found to be unsubstantiated with any other status protected by applicable law. representation. no further action taken. The third was still under investigation at the end of the reporting period. Orica employees are free to join unions and other associations. Company work sites range from completely non-unionised to entirely unionised in line with local practice. Around 37 percent of employees are covered by collective bargaining agreements. Orica is committed to negotiating in good faith with employees and their representatives. Orica consults employees about operational changes that affect them, and follows all local legal requirements and, where appropriate, provisions in collective bargaining agreements, with respect to consultant provisions and notice periods. While the minimum notice period varies in different parts of the Company and in various agreements and awards, Orica aims to inform employees about relevant changes as soon as practicable. Orica does not tolerate unlawful discrimination, harassment and/or bullying of its employees, contractors or members of the general public and appropriate action is taken if the Code of Conduct is breached.

14 A Diverse Team

KEY FACTS Globally, 18% of Orica employees are female Representation of women in senior management ranks (Executive and General Manager positions) has increased from 5% in 2009 to 18% in 2013 Over 40% of Orica’s managers have non- Australian backgrounds 98% of Orica’s employees are full-time, and 2% are part-time

Orica values, respects and seeks to leverage the unique contributions of people with diverse Listening to backgrounds, experiences and perspectives reflecting the many communities in which Employees and Orica operates. This commitment to diversity extends to all areas of the business including Making Changes recruitment and appointment to roles, talent development and succession planning, training that Count and development, flexible working arrangements and forms of leave available to employees. Orica is committed to providing employees with A review of remuneration across senior the opportunity to provide input on what they During 2013, Orica employees received diversity management showed that roles held by male think of the Company and what can be done awareness training as part of the Seven Pillars and female managers are paid in line with to make Orica a better place to work. program. Participants were introduced to market benchmarks. unconscious bias and ways to identify behaviours The Company’s Flexible Work Practice Policy Engagement feedback from employees is associated with inclusion and exclusion. To covers part-time employment, job sharing currently being received via the Seven Pillars support gender diversity, five “Orica Women in arrangements, flexible working arrangements, program. The program gives employees Leadership” programs were run across the globe flexible return from family leave, flexible the opportunity to provide feedback via a as well as three Female Leadership Programs in arrangements for ongoing care, phased “pulse” survey with questions common to Latin America, with participants coming from all retirement and working from home. Orica offers previous engagement surveys and, importantly, areas of the Company. employees can put questions to senior leaders family leave in line with legislative frameworks face-to-face. around the world.

Supporting Employees Through Investment in Systems A significant improvement was delivered in Human Resources (HR) support systems during the year. The first stage of a project to migrate all employee information to a single global system, PeopleNet, was completed, allowing employees to access HR support over the phone, chat or by email. PeopleNet standardises and simplifies HR processes and systems across the Company. The project will improve the way Orica organises, recruits, rewards and develops its workforce.

15 Sustainability Report 2013 SHEC OVERVIEW SHEC Overview

Orica has robust processes Risk Management in place to systematically Risk management is a fundamental pillar of Orica’s business activities, including the undertake risk management identification and management of SHEC across the Company’s activities, risks. Orica has robust processes in place to systematically undertake risk management products and services. across the Company’s activities, products and services. A key aspect of Orica’s risk Project Sustain commenced in 2012 as a management approach is a focus on global initiative to review Orica’s Safety, Health, preventative controls and the effectiveness Environment and Community (SHEC) systems of these controls. and structures, with the objective to ensure consistent leadership and fit for purpose The Company’s risk management system solutions to improve organisational SHEC is aligned with its business systems, including and risk management capabilities. SHEC. As such, continuous improvement of the risk information is achieved not just Concluding at the end of 2013, Project by regular periodic reviews and updates of the Sustain identified initiatives which will build data, but also by capturing and incorporating on Orica’s strong tradition of safety leadership. lessons learnt from other business systems Implementation of these initiatives will continue such as SHEC. As such, the supporting SHEC in 2014, to support the Company’s objective Management System and tools both inform, and of delivering tangible improvements in are informed by, the risk management system. performance. SHEC Audit KEY ACHIEVEMENTS IN 2013 INCLUDE: Orica’s corporate Safety, Health and Environment (SHE) auditors assess the effectiveness of site level Restructure of SHEC within the Corporate SHE Management Systems, compliance with Affairs and Social Responsibility function, the Company Model Procedures, management including the appointment of key personnel of significant risks and potential environmental and development of regional SHEC structures legacy issues. Audit findings are reported to site to support the business management, operational functional General Review and upgrade of the SHEC Management Managers and the Board SHE Committee. Each audit provides recommendations for improvement System, including updating policies, actions by the business and priorities for action. management standards and procedures In 2013, a comprehensive review of Orica’s audit to reflect the changes processes was undertaken, including external Review of Orica’s risk assessment processes benchmarking. A revised SHEC audit strategy and development of a standardised partially was developed for design and implementation quantitative risk assessment process for in 2014, to reduce duplication between corporate implementation across the organisation and site audits, improve audit focus on legal compliance and include community in the Selection of a new integrated SHEC information audit scope. The revised strategy will see the management and reporting system (Enablon) consolidation of previous corporate and business to be implemented in 2014 SHE auditing processes and Orica sites subject to a more comprehensive SHEC audit every three years. Implementation of the Incident Cause Analysis Method (ICAM) as the standardised incident investigation methodology across Orica Priorities for coming year Introduction of a requirement for site-specific Environmental Management Plans to be in place Completing development of the new at all Company production facilities SHEC management system and subsequent Development of stakeholder plans at a number roll out of key sites to provide a more consistent Launching the new Enablon incident approach to engagement management, action planning and Review of the SHE audit program to deliver performance reporting modules a more streamlined and standardised process Commencing implementation of the new and improve integration with other SHE consolidated SHEC audit program assurance system elements

16 CS

Learning From Incidents Orica requires that Prior to 2012, Orica used a number of different ICAM Lead Investigator training commenced in methods for incident investigation. December 2012 and by May 2013 more than all significant Safety, To support improvement in SHEC performance, 350 Orica employees from over 20 countries Health, Environment it was decided to move to a standard incident were trained, supporting deployment in over investigation method across the Company 10 different languages. More than 20 senior and Community (SHEC) globally. The Incident Cause Analysis Method manufacturing managers also completed incidents be investigated (ICAM) was selected as the one that would add high-level awareness training to champion the to prevent recurrence most value to Orica. ICAM methodology in their operations. Orica is continuing to embed the ICAM process across ICAM is increasingly being adopted for incident and enable sharing of the company to support improvements in SHEC investigations in the mining industry globally. performance. lessons learned. As well as assisting Orica to improve its safety performance, adopting ICAM allows for more Sean Winstone, Manufacturing Executive, active engagement and participation on mining Continuous Plants commented, “Getting to the customer sites, should an incident occur. root cause of incidents is something that we as Operations Manager North America, Randolph the manufacturing team have as one of our key Scott notes, ”Several of our customers use priorities to ensure we improve performance. ICAM, which has allowed us to be more aligned, When I look at the outcomes of investigations talk the same language and collaborate to that have used ICAM, I am confident that not prevent incident recurrence.” only have we found the immediate cause but the underlying root causes that sit within our The ICAM methodology will assist Orica in systems. I know that working on these will determining not only the immediate cause of drive real improvement.” incidents but also deeper contributing factors at local and broader organisational levels, allowing for improved incident trend analysis. ICAM is also designed as a blame-free investigation model which promotes a “just culture” and long term organisational learning.

17 Sustainability Report 2013 SAFETY

Orica’s value of “No Accidents Today” underpins the Company’s commitment to the safety, health and wellbeing of its people globally.

In 2013 Orica adopted ICAM, the Incident Cause Analysis Method, as the global standard for investigation of significant incidents. ICAM aims to identify local, immediate factors and failures within the broader organisational system that contributed to an incident. Orica uses the findings of incident investigations to make Safety recommendations on remedial actions to reduce risk and build defences against future incidents across the Company.

Key Challenges and Opportunities Personal Safety Orica’s key safety risks relate to: the Personal safety incidents have the potential to Top quartile manufacture, distribution and use of explosive cause physical injury to an individual and include safety performer on ASX100 materials and chemicals; interactions of people slips, trips and falls, manual handling injuries, with plant and equipment; vehicle activities; and cuts, crushes and electric shocks. All Orica sites Recorded Orica’s travel to and work on customer sites. have annual SHEC improvement plans, including key personal safety improvement initiatives. The Company’s global operations stretch to over lowest ever 600 sites ranging from single person operations Injury Severity Index to plants of more than 200 employees, creating challenges to define and communicate clear and fit for purpose standards and targets. However, Number of Fatalities such diversity allows for finding and sharing best 70% reduction practice within Orica and with our customers, 4 in High Potential Incidents associated with high suppliers and regulators. explosive interactions on customer mine sites Learning Incidents Orica recognises the importance of learning from incidents to prevent recurrences. The Company fosters a culture of incident reporting 1 1 and investigation, including emphasis on “near miss” events that represent opportunities 0 0 to learn and improve Orica’s SHEC performance. 09 10 11 12 13 There were 111 High Potential Incidents across the Company in 2013, compared with 148 in 2012.

18 Injuries and Illnesses Injury Severity Index Process Safety In 2013 Orica achieved an All Worker The use of AWRCR as a safety metric is limited Process safety incidents have the potential Recordable Case Rate (AWRCR) of 0.54 by its inability to differentiate between injury to result in multiple injuries or fatalities, major compared to 0.47 in 2012. There were no severities. Orica’s Severity Index is an internal equipment damage and impact to local fatalities. The AWRCR is the number of metric that weights all recordable injuries on a communities or the environment. Process recordable cases (using Occupational Safety scale of 1 to 100. Significant injuries such as lost Safety is most relevant to Orica’s manufacturing and Health Administration (USA) guidelines) workday cases are allocated a greater score than operations where the Company operates per 200,000 hours worked by employees and a lesser injury that requires medical attention a number of chemical process plants. contractors. Orica is consistently a top quartile only. This internal metric facilitates a higher level New process excellence and maintenance teams performer for safety performance of ASX top of focus on the more serious injury events, to were established within the manufacturing 100 companies. Orica’s Lost Workday Case reduce the likelihood of recurrence. In 2013 the function in 2013. These teams are developing Rate (LWCR) was 0.26 compared to 0.16 in Injury Severity Index was at a record low level improved systems and procedures designed 2012. LWCR is a sub-set of Orica’s AWRCR and of 3.37, compared to 3.85 in 2012. In 2014 this to standardise and improve practices across measures the number of lost work day cases metric will be revised to align more closely with all Orica operations. This impacts the per 200,000 hours worked by employees and external standards and allow for more effective design, operation and maintenance of our contractors. Orica’s AWRCR and LWCR have benchmarking. process plants, with the aim of delivering both increased in 2013, with the majority of improved Process Safety performance. Large injuries being associated with hands and manual manufacturing sites have also continued handling type activities. The overall severity of to develop the measurement and tracking injuries recorded has decreased year on year. of Process Safety metrics. Orica’s Technical Panels provide technical advice on management of manufacturing processes and practices. Panels are in place for each of ammonium nitrate (including nitric acid), chlor-alkali (chlorine), cyanide, explosives, initiating systems (IS), surface mining applications, underground safety and logistics. Technical Panels undertook a number of safety audits of key technologies and also advised on technical safety for significant capital projects.

NOTABLE 2013 PROCESS SAFETY INCIDENTS WERE: A small explosion occured at Orica’s detonator manufacturing plant at La Portada, Chile. The plant experienced equipment damage that prevented it from operating for two weeks; however, injury was prevented, consistent with the safe design of high explosive plants. An operator was splashed with ammonia solution while draining a vessel during plant startup at Kooragang Island, Australia. The operator was treated in hospital and discharged the next day.

All Worker Recordable Case Rate Recordable Cases: By Region

47.1 42.1 40.0 43.9 42.6

0.69 0.63 0.54 0.47 0.47 Priorities for coming year

Implementing targeted injury reduction programs in manufacturing and for Africa 1 driver safety Asia 11 09 10 11 12 13 Australia Pacific 30 Embedding the ICAM investigation process to ensure high quality investigations and Europe and Middle East 23 key lessons learned are shared across the AWRCR Latin America 18 organisation Million hours worked North America 32

19 The Sustainability Report 2013 HEALTH

Occupational Health

Orica is committed to the health Health programs are reviewed regularly against leading practice and the focus in 2014 will be and wellbeing of all people involved on reviewing standards and exposure limits, in the business. Employing over particularly for Orica’s people operating on 30 health professionals globally, customer sites. the health of Orica’s people, visitors Fatigue and communities is a priority. Fatigue is a key health hazard and a fatigue management process has been developed. The process requires that an assessment is undertaken when existing or proposed work hours exceed a defined set of conditions. CS 98.5% If significant potential risks are identified, of scheduled health assessments completed, a Fatigue Management Plan must be developed annual target of >95% met and implemented. This program is being piloted and will be implemented in 2014.

Travel Health and Safety 99.5% Orica’s global footprint requires employees of scheduled industrial hygiene samples taken, to travel to locations where endemic health annual target of >95% met hazards are present (including malaria, hepatitis and yellow fever) and access to adequate medical facilities may be limited. The Company’s 650 procedures require that health and security exposure assessments to hazardous assessments are undertaken before people agents completed travel to locations where significant health, safety or security concerns exist. In 2014, these procedures will be reviewed to better integrate Key Challenges travel health requirements at the start of travel and Opportunities arranging processes. Orica’s key health risks relate to exposure to hazardous agents such as noise, dust, solvents Health Assessments Gomia and other chemicals. Exposures to people can Orica’s fitness for work health assessment occur at Orica’s own manufacturing, storage programs are targeted to specific jobs or handling facilities or at customer sites where and potential exposures. Over 7,800 Hospital and Orica people are providing services. health assessments were conducted in 2013 to ensure employee health With the global nature of Orica’s business and was not impacted by workplace activities. Community the significant number of people travelling to work on remote customer sites, fatigue and Psychological Health travel pose health risks unless well managed. Support A number of services are offered to Orica’s Hazardous Agents people and immediate family members for The Ardeer Hospital in Gomia, India managing stress and work–life balance issues. Orica has well defined processes to control was opened in 1958 by Orica to provide Employee assistance programs are being workplace exposure to hazardous agents, preventative and curative medical services reviewed to ensure consistency across Orica’s including risk identification, exposure and assistance to Orica employees and operations globally. their families. assessments and ongoing monitoring. In 2013, 650 potential hazardous agent exposure With four permanent doctors and eight assessments were undertaken at Orica’s Priorities for coming year nursing staff, the 35-bed hospital also manufacturing facilities and field operations. Implementing the Orica fatigue provides first aid training for Orica Where a likelihood of exposure was identified, management procedure staff, occupational health checks and samples were collected to quantify actual occupational hygiene monitoring. exposure. Over 3,700 samples were collected Completing the review of travel health procedures Over the past four years, eight free and analysed relating to more than 40 discrete hazardous agents. In most cases, existing medical camps set up around Orica’s Developing the health and hygiene module engineering controls were effective in ensuring site have provided free immunisation within the new integrated SHEC information exposure remained below relevant limits; to 3,000 community members including management and reporting system (Enablon) Orica personnel. personal protective equipment was required to control exposure in less than 20 percent database of instances.

20 Orica understands that excellence in environmental performance is essential to ongoing business success.

Environment Key Challenges and Opportunities Environmental Management Systems Orica’s key environmental impacts relate As part of Project Sustain, Orica has strengthened 4% to emissions from and use of resources at its environmental management systems and decrease in greenhouse gas emissions manufacturing sites. The most significant processes to support improved environmental portion of Orica’s energy, greenhouse gas, performance. All Orica operating sites are More than water and waste footprint is related to the required to develop and implement site-specific major continuous manufacturing facilities, the Environmental Management Plans (EMPs). tonnes largest of which are based in Australia. Orica These ensure that sites have identified their 750,000 also has a number of sites impacted by historical key environmental risks and controls and

CO2-e abated at nitric acid plants operations that require ongoing management have documented plans in place to minimise to minimise risks to the environment. Many of environmental impacts and prevent legal Site Environmental Management Plan these sites are in close proximity to communities. non-compliances. EMPs are to be in place at operating sites before the end of December 2014. A number of Orica’s products are EMP environmentally hazardous, requiring Environmental compliance management and development program commenced appropriate management during manufacture, environmental performance data reporting transport and use to minimise the potential for systems will be improved over the coming two environmental impacts. However, many of these years with the staged implementation of a new products also help customers achieve better integrated SHEC information management and environmental outcomes, such as reducing reporting system at all operating sites. energy use in mining processes and ensuring water meets desired quality requirements.

21 The Sustainability Report 2013 ENVIRONMENT Continued

CS

Global Nitrous Oxide Abatement Program

May 2008 was a significant month for gas with a global warming potential 310 The latest chapter comes with the

David Hind, Technical Manager of Nitrates times that of carbon dioxide, N2O emissions installation of secondary abatement catalyst processes at Orica Carseland, Canada. It from Orica’s nitric acid plants (NAPs) have at the Bontang, Indonesia plant. As Agus represented the first successful abatement historically contributed over 60 percent of Salim, Safety, Health, Environment, Risk

of tail gas nitrous oxide (N2O) emissions Orica’s carbon footprint. Secondary N2O and Quality Manager at Bontang explains:

through secondary abatement technology abatement technology breaks down the N2O “The abatement and plant design at at an Orica plant. It also signalled the molecule into harmless nitrogen and oxygen. Bontang’s nitric acid plant represents beginning of what has since become proven and effective technology and Yarwun’s nitric acid plant No.3 (YNAP3) a company-wide abatement program delivers an Orica production hub for in Queensland, Australia continued the spanning three continents. South East Asia in an environmentally abatement program in 2010. The plant trial responsible manner.” In David’s words, Orica had found a way used a catalyst developed in-house by Orica. to “destroy nitrous oxide and generate The trial was a success, and today Yarwun Optimisation of abatement technology

enough credits to pay for the technology”. YNAP3 consistently achieves N2O reductions at Carseland CNAP2 and Yarwun YNAP1 This was possible through an agreement of 80 percent. and YNAP2 are expected to deliver further with a local coal-fired power plant for the reductions in 2014. In 2012, further abatement projects were purchase of carbon credits to offset carbon undertaken in Canada (Carseland CNAP2), dioxide emissions, with support from the and Australia (Kooragang Island KNAP2 and catalyst technology providers and local KNAP3 and Yarwun YNAP1 and YNAP2). regulators. The four Australian abatement projects Nitric acid is a component in the have reduced Orica’s liability under the price

manufacture of ammonium nitrate. N2O on carbon introduced by the Australian is evolved from the nitric acid production Government in July 2012. process as a waste gas when ammonia is burnt in air then cooled. As a greenhouse

NITRIC ACID PLANT N2O INTENSITY REDUCTION TIMELINE

2.75 For the purposes of this illustration intensity figures assume production 2.50 rates equal to those achieved in the 2013 period. 2.25

2.00

1.75 -e per tonne of nitric acid) 2 1.50

1.25

1.00

0.75

0.50

0.25

0.00

0 emissions intensity (tonnes of C0 May ’08 May ’08 Aug ’08 May ’10 Mar ’12 May ’12 Aug ’12 Sep ’12 Sep ’12 Oct ’12 Current 2

N Baseline CNAP1 KNAP1 YNAP3 CNAP2 New plant YNAP1 KNAP2 KNAP3 BNAP1 Sep ‘13 BNAP1 Starts

22 Legacy Sites Orica pleaded guilty to four counts of breaching Emissions Orica manages legacy issues associated with the Queensland Environmental Protection Act as There were seven recordable (Category 2+) historical operations at a number of sites a result of unauthorised stormwater and effluent site losses of containment recorded at Orica around the world. The Company is committed releases from its Yarwun, Australia facility operations in 2013, compared with nine in to managing the legacy of contamination from between February 2010 and February 2012. 2012. No significant off-site environmental historical activities and to working constructively There was no evidence of any environmental impacts occurred as a result of these losses. with local site communities and regulators. In damage as a result of the discharges. In Of the seven incidents, six involved the loss 2013, remediation activities were undertaken November 2012, the Court ordered Orica of containment to either bunded (contained) at sites in Australia, Norway, Sweden, Brazil and to pay a fine of $432,000, including $250,000 areas or to the ground, and one resulted in the USA. to three community environmental groups. an emission to air. Incident investigations were No convictions were entered. undertaken in each case and appropriate At Botany, Australia, remediation works have corrective actions implemented to prevent recommenced at the former chlor-alkali site. Orica is currently the subject of legal proceedings further recurrence. Testing indicates that there is no unacceptable issued by the New South Wales Environment risk to human health or the environment posed Protection Authority in relation to incidents at its Orica reports chemical releases from many of its by the mercury contamination. Planned work is Kooragang Island and Botany sites that occurred global operations in accordance with Australia’s expected to take two years. Hexachlorobenzene during 2010 and 2011. Orica has entered guilty National Pollutant Inventory (NPI) program. (HCB) waste at the Botany site continues to be pleas to the charges involved. A sentencing and mitigation hearing was held in the NSW Land stored safely and securely while commercially Annual data for the 12-month proven and environmentally sound methods for and Environment Court in December 2012. period ending 30 June is the destruction of this stockpile are investigated. The matter is currently adjourned pending a available at www.orica.com/ decision from the Court. sustainability Compliance Orica is also the subject of legal proceedings A number of Orica’s sites are specifically issued by the Victorian Environmental Protection regulated by environmental legislation, Authority in relation to an incident involving manufacturing licences and environmental fluorosilicic acid that occurred in September consents. Orica aims to comply with all 2010 in Gippsland, Australia. Orica is yet to applicable legal obligations as a minimum enter a plea in relation to these proceedings. standard and to work constructively with local environmental regulatory authorities to resolve any compliance issues that arise.

Energy Use on-site production in 2013. Orica’s net energy Waste Management intensity increased to 4.66 GJ per tonne of Orica uses both electricity and fuels in Orica works to minimise the amount of waste production in 2013, a 13 percent increase from manufacturing processes. Some fuels such as generated at its operations, prioritising activities 2012, again, primarily relating to KI being fully natural gas and diesel are also used as a raw to: eliminate or minimise waste streams where operational. material in product manufacture. Ammonia possible; increase opportunities for reuse and is Orica’s most energy intensive product to Opportunities for energy efficiency recycling; and treat and dispose waste where manufacture and uses significant amounts improvements are identified and investigated other options are not practicable. of natural gas as a raw material. In 2013 at Orica sites. Orica participates in the Australian In 2013 Orica generated 16,900 tonnes Orica consumed 22.7 million gigajoules (GJ) Government’s Energy Efficiency Opportunities of waste, of which 39 percent was classified of direct energy, a 20 percent increase from Program (EEO). In 2013 the Botany site identified as hazardous. This represents an increase of 2012, primarily due to the Kooragang Island 20 opportunities to be implemented as part of two percent from the 2012 result. (KI) Ammonia Plant being fully operational an EEO assessment. These opportunities are in the period. Direct energy consumed is expected to deliver a total saving of $1 million predominantly purchased natural gas and and 152,000 GJ of energy consumption electricity. 285,000 GJ of energy was from per year.

Net Energy Consumption Energy Consumption by Material Waste Disposal by Destination

4.75 4.66 4.57 4.15 4.11

22.7 21.4 19.9 18.9 17.2

Natural gas – ammonia feedstock 35% Landfill 44% Natural gas – used as fuel 28% Recycled 39% 09 10 11 12 13 Other 18% Destroyed or treated onsite 10% Electricity 8% Reused 7% Net energy consumption (M GJ) Natural gas–sodium cyanide feedstock 7% Energy intensity – GJ per tonne Diesel oil – product feedstock 4%

23 The Sustainability Report 2013 ENVIRONMENT Continued

Greenhouse Gas Emissions Greenhouse Gas Emissions Orica’s direct (Scope 1) greenhouse gas emissions Net Greenhouse Gas Emissions by Scope and Gas arise from fuels such as natural gas and diesel 0.87 consumed at operating sites, as well as direct 0.71 0.55 0.54 0.50 process emissions such as nitrous oxide (N2O). Indirect (Scope 2) emissions arise from energy 3.3 3.2 supplied such as electricity and steam. Orica’s 2.1 2.0 2.7 greenhouse gas profile is dominated by direct 2.5 2.4 emissions of N O, a by-product of nitric acid 1.6 2 1.6 1.2 manufacture. Other significant direct emissions relate mainly to CO2 from the production of 1.2 1.2 1.1 1.2 ammonia at KI. 0.9 09 10 11 12 13 Scope 1: CO 0.7 M tCO -e In 2013 Orica emitted 1,893,000 tCO2-e 2 2 (tonnes carbon dioxide equivalent) of Scope 1: NO as CO -e 1.2 M tCO -e Scope 1 CO + Scope 2 CO -e emissions 2 2 2 greenhouse gases as direct (Scope 1) emissions 2 2 (M tCO2-e) Scope 2: CO2-e 0.5 M tCO2-e and 529,000 tCO2-e as indirect (Scope 2) emissions, a five percent decrease and N2O emissions (M tCO2-e) two percent increase respectively over 2012 Greenhouse Gas Emissions Intensity results. Total 2013 Scope 1 and Scope 2 (tCO2-e per tonne) emissions reduced by four percent compared to 2012. Orica’s 2013 net greenhouse gas intensity was 0.50 tCO2-e per tonne of product, Overall a reduction in nitrous oxide emissions a seven percent decrease from 2012.The impact intensity of more than 50 percent over of KI being fully operational was more than baseline has been achieved at Orica’s nitric acid offset by increased N2O abatement. plants. Abatement installed at the Bontang, Indonesia plant in November 2012 received Greenhouse gas abatement projects registration under the United Nations Framework commissioned since 2010 at sites in Australia, Convention on Climate Change (UNFCCC) Clean Canada and Indonesia have reduced nitrous Development Mechanism (CDM) program. The oxide emissions by more than 750,000 tonnes project is expected to generate 140,000 carbon of carbon dioxide equivalent (CO -e) in 2013, 2 credits annually. compared to pre-abatement baselines.

Water Management Water Consumption Water Consumption by Source

Orica consumes water for process use in cooling 2.16 2.11 1.96 1.92 towers, for cleaning equipment, for safety 1.91 showers and eye wash stations and employee 9.5 9.4 9.3 amenities. Water is also used as a raw material 8.8 for product manufacture. Orica’s gross water 8.1 consumption in 2013 was 9.3 million kilolitres (kL), a 6 percent increase from 2012. Orica’s overall water use intensity increased to 1.92 kL per unit of product in 2013, a 0.5 percent increase from 2012, due to KI, Potable water 66% 09 10 11 12 13 the Company’s most water intensive site, being Groundwater 19% fully operational in the period. KI consumes Net water consumption (M kL) Surface water 13% 37 percent of Orica’s total water for use in Water intensity (kL per tonne) Recycled or waste water 2% manufacturing processes. Orica is also committed to finding solutions to help customers reduce their reliance on potable and surface water. In Queensland, Australia, a ‘fit for purpose’ wastewater treatment plant was designed for installation at a customer site Priorities for coming year to treat waste process water and stormwater runoff, which is then re-used within site Implementing Environmental Management operations. When run at full capacity, this has Plans (EMPs) at operating sites the potential to reduce the amount of surface water drawn from surrounding areas by 6,000 Developing the legal compliance kL per day. management system within the new integrated SHEC information management and reporting system (Enablon) database

Optimising installed N2O abatement equipment at Carseland and Yarwun

24 Orica is committed to effective and targeted engagement with the communities that host the Company’s operations.

Community

Key Challenges and Opportunities Sites have been prioritised for stakeholder Stakeholder plans developed at The number and diversity of Orica operations planning, with the first being larger around the globe presents a challenge for manufacturing and storage sites that are 15 sites developing a consistent approach to community located within communities or close to them. Following a successful pilot, stakeholder plans across Australia and New Zealand relations. The Company is working on ways to expand the reach of its programs globally and were completed at 15 sites in Australia and New Zealand with further plans to be developed Operational and site community investments establish targeted partnerships in other regions globally during 2014. Working with SHEC and database now in place where it operates. operational managers across the Company, Stakeholder Engagement “train the trainer” materials and guideline documents will be deployed to establish a Stakeholder plans are being developed for shared understanding of key concepts and $1. 4 M Orica’s operating sites as part of the Company’s sound practice. Community investment expenditure in 2013 commitment to improve the way that it engages with communities, government, and Orica is continuing to work on evolving its other key stakeholders. These plans provide a methods of engagement to suit the needs consistent and structured process for identifying of local stakeholders and the business. stakeholders and addressing issues and These may include independently chaired opportunities in a balanced way. consultation groups, newsletters, fact sheets, Orica information stands at local events and community meetings.

25 The Sustainability Report 2013 COMMUNITY

CS Orica in the Community

“We are very grateful Orica’s Yarwun manufacturing facility near branch of Conservation Volunteers Gladstone, Australia is an integral part of Australia (CVA), which received $90,000 for the time that Orica the Company’s global operations, producing of Orica’s mandated fine. Yarwun employees staff have volunteered over 500,000 tonnes of ammonium nitrate have volunteered their time to help with CVA product a year. The site is a major contributor initiatives including native dune restoration, in helping us to protect in the mining and industrial hub of Central catchment care, and tree planting. Queensland, employing more than 200 the local natural “CVA and Orica have developed a terrific permanent employees and 100 contractors. environment.” relationship in Gladstone and we are very Caitlin Davies – Regional Manager In 2013 Yarwun was fined $432,000 as the grateful for the time that Orica staff have Conservation Volunteers Australia result of non-compliant stormwater and volunteered in helping us to protect the effluent discharges in early 2010 and 2012. local natural environment,” said Caitlin Stakeholder interest following these events Davies, Regional Manager Conservation prompted Yarwun to rethink its approach Volunteers Australia. to working with stakeholders and the site “We particularly applaud the way in which developed a comprehensive new engagement Orica has chosen to expose their new plan focused on building and maintaining graduate employees to local Gladstone robust relationships at the local level. community initiatives. We believe that Site General Manager Orica Yarwun, by involving future managers in local Jon Barden, explained: “Orica Yarwun is community relationships, Orica is making committed to playing an active part in our a wise investment that will return great community and building relationships with dividends in years to come.” our stakeholders in the broader Gladstone Building on Yarwun’s journey, Orica community. These relationships are key to is implementing a new stakeholder promoting community awareness of Orica engagement process at all major sites and our place in the industrial framework of across the globe, strengthening existing our region, providing us with the opportunity stakeholder relationships and building to have an open dialogue with community new ones. Stakeholder plans have been members about our operations and address developed at 15 sites across Australia any concerns they may have.” and New Zealand and further plans will One relationship that is going from strength to be rolled out globally during 2014. strength is Yarwun’s interaction with the local

26 Human Rights and Cultural Heritage Orica recognises the importance of respecting human rights and cultural heritage in the communities in which it operates around the globe. Orica’s approach to human rights is embedded in the Code of Conduct and supporting systems. The Company will review systems and processes in 2014.

Expenditure by Category

Community Investment Orica sites around the world also supported Orica has adopted a more proactive approach a range of local and regional initiatives in to community investment in line with its aim 2013, including: to improve the overall quality and reach of its Peru programs across the business. In Arequipa, employees at Orica’s Congata site provided food, water, health care, and school Orica’s corporate community investment supplies to their neighbouring community of program is funded to the equivalent of Villa Union after a freak rain event caused major Community health and welfare 37% a dividend on a shareholding of 0.5 percent damage across the area. Overall, more than Education 31% of ordinary Orica shares. Local community 1,800 people benefited from Orica’s assistance investments are made in addition to Community events 14% after the flooding event. this amount. Sports teams 7% New Zealand Environment 6% In 2013 the focus was on improving Chemicals’ Mount Maunganui site donated the understanding of local community waste Intermediate Bulk Containers (IBCs) Other 4% investments across Orica and reviewing to the Tect All Terrain Park for use as water Emergency services 1% corporate level community investments to reservoirs in the event of a fire within the park. prioritise opportunities for the future. New guidelines were developed and the stakeholder A volunteer fire fighting crew protects this planning process now includes a community 1,650 hectare park. The IBCs are located in six Expenditure by Region investment section where investments are locations throughout the park to allow crews reviewed and scaled to align with corporate, to refill their 2,000-litre fire truck quickly in the site and local community priorities. event of a fire. A centralised database of community Brazil investment has been established and will Orica’s Lorena site, located in a low continue to be refined. The database provides socio-economic area, donated 12 computers breakdowns by region and categories of to a local school, enabling them to have a expenditure. The total value recorded for dedicated computer room for student use. 2013 was $1.4 million with 71 percent Additionally, bathrooms at the school were Australia Pacific 71% refurbished with Orica’s assistance. of funds spent in Australia. Latin America 10% As a result of a review of existing corporate Graduate Volunteering Asia 8% In 2013, Orica Graduate Program participants programs there is a stronger focus on North America 6% strengthening relationships with program from Latin America, Australia Pacific and EMEA 5% partners, and deploying relevant programs into Asia took part in volunteering days in their Orica’s regions of interest. For example, as the respective regions. Science and Technology Education Leveraging • In Brazil, graduates from the Latin American Priorities for coming year Relevance (STELR) program – which supports region teamed together with Vale Verde, maths and science in year 9 and 10 – expands a non-government organisation, to plant Rolling out the stakeholder planning across Australia, New Zealand and Indonesia, seedlings in a degraded agricultural process globally the Company is working with the Australian environment. Reviewing opportunities to broaden the Academy of Technological Sciences and • In Indonesia, graduates from Asia came community investment program and Engineering to target schools local to Orica sites together to visit and support a local establish targeted relationships in regions so that Orica people can contribute directly to orphanage – the Yayasan Sayap Ibu or outside of Australia the program’s success. “Mothers Wing Foundation”. The graduates spent the day helping out at the orphanage, Focusing on maximising value from and distributed food and gifts to the children. community investments with agreed • In Melbourne, Australian and New Zealand leveraging programs graduates completed a litter audit and Reviewing the Company’s approach beach cleanup, revegetated a historic to human rights Indigenous camp site, and created a rain garden to filter stormwater.

27 The Sustainability Report 2013 PRODUCT STEWARDSHIP Product Stewardship

At Orica, product stewardship Projects and Technology Use and Disposal means adopting life cycle Before developing or introducing a new product, When products leave Orica’s direct control and considerable attention is given to determining are distributed, sold and used by customers, thinking in the creation the physical, chemical and biological properties, the Company aims to influence the responsible and delivery of its products and assessing the potential risks to people and storage, use and eventual consumption or the environment. Regulatory frameworks in disposal of the product. and services. different jurisdictions in which Orica operates The basic life cycle product risk assessment inform research and development. For process ensures that the use and disposal of example, a full Life Cycle Assessment (LCA) products and product packaging is assessed was conducted as part of a project to deliver and improvements implemented where possible. a new high-energy extension to Orica’s existing Often this can be as simple as raising the ammonium nitrate based bulk explosives awareness of the customer to the correct use product range. The LCA was completed in and disposal requirements, through to ensuring accordance with International Standards that packaging is recycled for use – such as ISO 14040 and ISO 14044. Orica’s existing the Schultz IBC (Intermediate Bulk Containers) baseline ammonium nitrate LCA was updated Ticket Service – a collection service for used as part of the project. Schultz IBCs available in all of the world’s major Manufacturing industrial regions. Before a new product is manufactured or Stewardship programs such as Ammsafe for a new process is commissioned at a plant, ammonia, Chlorine Safeguard for chlorine and a number of specifically designed Hazard Solvent Care for chlorinated solvents, inform Studies are used to assess and eliminate and support customers. Advice includes the safe or control associated hazards. Processes are disposal of Orica products where appropriate. optimised to maximise efficiency and process Value Chain safety and to minimise waste. Research and Development Distribution Orica invests in research and development Safety, Health, Environment and Community (R&D) at the Company’s own sites and through (SHEC) performance is paramount when collaborative R&D arrangements with universities selecting transport companies for the and research institutes. The Company operates distribution of products, warehouses for the R&D centres in North America, Europe, Africa, storage of products, and ports for the import India and Australia. Orica’s approach to R&D is and export of raw materials and finished goods. to provide superior products and services that Orica’s transport drivers are trained to identify improve efficiency, productivity and sustainability and avert potential SHEC risks at customer sites performance for customers. and other facilities. Desktop emergency exercises Read more on Orica’s innovative customer are conducted with transport companies, solutions – Higher Energy Bulk Explosives customers and emergency authorities. and Mineral Carbonation on pages 8 and 9.

28 CS

Global Cyanide Emergency Response Network Orica Mining Chemicals supplies Emergency response simulations and sodium cyanide to the mining exercises are used to test and check the industry in countries such as performance of the local emergency responders. Learnings and subsequent Peru, Ghana, Tanzania, Thailand, improvements are incorporated in future Indonesia, Papua New Guinea, training packages. and Australia. The process of training cyanide emergency Handling sodium cyanide is a responsibility responders is ongoing, with succession planning at the core. It is Orica’s aim to Customers which Orica takes very seriously. Due to ensure existing emergency responders pass Orica works with customers to minimise the SHEC the global nature of this supply chain, it is critical to have local on-site emergency on their knowledge and skills to those who impacts of its products during distribution, storage, follow them. use, recycling and disposal where practicable. responders available 24 hours a day, seven days a week, wherever this chemical is By training customer and carrier The approach taken varies by customer across supplied. Following a global safety audit, representatives, Orica is building a strong the globe, reflecting the different risks and Orica decided to address and increase the foundation of knowledge in its global opportunities inherent in Orica’s different products level of site support. supply chain for managing a cyanide and services. For example, Chemicals has adopted incident. An additional benefit is the the practice of conducting bulk delivery safety After extensive collaboration with growing skill base of supply chain partners, inspections at customer sites where hazardous customer and carrier representatives, over making this a resourceful solution for all substances are delivered. 55 individuals were identified as Orica Emergency Responders. parties involved. Suppliers These representatives have been Orica is a signatory to the International As part of evaluating and selecting major suppliers Cyanide Management Code (ICMC), and of raw materials, services and products, suppliers comprehensively trained using best practice tools and techniques, including the Company’s cyanide manufacturing are assessed against Orica’s SHEC performance facility (Gladstone, Queensland, Australia) standards. Examples include: collaborative online training and, in some regions, face-to-face training. Emergency and transfer stations (Peru and Ghana) are • Orica’s Yarwun sodium cyanide plant has response plans, procedures and standards fully ICMC accredited. Additionally, Orica’s a strict requirement that its suppliers use have been developed to guide the response global supply chain is ICMC accredited, Plantation Certified timber for all wooden to a cyanide emergency. Where required, with route assessments conducted by packaging requirements. emergency response equipment has been accredited third party contractors for road • A project has commenced in Indonesia to provided to further enhance the capability deliveries, and due diligence programs for reduce the use of packaging, by eliminating of a region to respond to an incident. port and rail delivery operations. bulk bags and replacing these where possible with bulk material shipped inside lined shipping containers. • Bronson and Jacobs, a leading supplier to the food, nutrition, health and personal care industries, is a member of the Roundtable of Sustainable Palm Oil (RSPO). Palm oil suppliers are required to be members of RSPO and meet its requirements.

29 The Sustainability Report 2013 PRODUCT STEWARDSHIP Continued

Product Safety A total of 14 significant (Category 2+) product Orica is committed to providing safe and incidents were reported in 2013, compared with effective products and services, with a number 23 in 2012. Of the product incidents reported, of systems and services in place to support eight occurred in the Australia Pacific region, this objective. five in North America and one in Europe, Middle East and Africa (EMEA). Safety Data Sheets Types of incidents included: loss of containment, To comply with the United Nations “Globally incorrect product deliveries, damaged Harmonised System of classification and packaging, transport incidents and a tank labelling of chemicals” (GHS), Orica has updated failure. In all instances, Orica worked with the its system for Safety Data Sheets (SDS) and customer to resolve the product issue and labelling. GHS is being progressively implemented recommended, advised and/or implemented internationally and will be mandatory after process or procedural improvements to mitigate 1 January 2017. Work has commenced to the risk of recurrence. update more than 8,000 Orica SDSs. Distribution Incidents A SDS is an important source of information Orica defines a distribution incident as one that that should be considered when making does not occur on a Company site. It arises decisions on managing risk from hazardous from the transport or storage of raw materials, chemicals in the workplace. Orica Chemicals products, intermediates or wastes owned by systems automatically email updated SDSs to Orica or prior to delivery to the customer. all customers, sites and contractors that have purchased or deal with that product. The A total of 41 distribution incidents were SDSs are also available at www.orica.com recorded in 2013, compared to 33 in 2012. Of the 41 incidents, 39 were rated as significant Emergency Response Service (Category 2) and two as serious (Category 3). The Emergency Response Service (ERS) operates Of the distribution incidents reported 15 24 hours a day, seven days a week, providing occurred in Australia Pacific, 14 in North telephone advice and assistance to callers in America, six in Latin America, three in Asia, emergency situations relating to transport, and three in EMEA. storage and use of chemicals. ERS acts on behalf Distribution Incidents of 110 subscribing client companies and Orica Twenty-one of the incidents related to vehicle rollovers, including six involving Orica operated 43 businesses in Australia and New Zealand. In 41 2013 ERS responded to 2,367 emergencies in vehicles. Historically these incidents have been infrequent. In response, Orica has formed a 33 total, with 169 of these incidents being related 30 to Orica products and sites in the Australasian global working group addressing distribution 22 region, compared with 167 calls in 2012. related incidents and specifically rollover events. Product Incidents As a result, in-cab cameras are being installed in carriers in Australia and trialled in North Orica defines a product incident as an incident America, Latin America and EMEA. with SHEC implications involving a Company product after delivery to a customer, including An awareness campaign is also underway 09 10 11 12 13 after delivery to a toll manufacturer or contract relating to the use of GPS tracking to encourage packer premises. improved driver behaviour.

Types of Emergency Calls Received by Orica’s ERS

Distribution incidents 24% Human exposure 17% Security incidents 17% Site loss of containment 17% Site incident advice 10% Emergency simulations 9% Other 6%

30 Participation and Commitments Orica participates in a number of key industry Orica participates in the UN Explosives the Business Council of Australia (BCA); organisations and programs to support Working Group and the International Group the Minerals Council of Australia (MCA); collaboration and sharing of leading practice. of Experts on Hazards of Unstable Substances and the Australian Mines and Metal These include: – Explosives, Propellants, and Pyrotechnics Association (AMMA) (Orica’s Managing (IGUS-EPP). Director and CEO is currently the President • The International Council of Chemical of AMMA). Orica is an active member of the Associations (ICCA) – Orica is a signatory to • International Cyanide Management Code Australian Water Association, the Australian the ICCA Global Charter and has adopted (ICMC) – Orica is a signatory to the ICMC. Water Industry Operators Association and five their Responsible Care® program in Australia, Read more about Orica’s ICMC status on cooperative research centres with relevance New Zealand and Latin America. page 29. to the Australian water industry. • Explosives Safety Organisations – Orica is a • World Coal Association (WCA) – Orica Group Member of the global explosives safety became a member of the WCA and the Orica is also committed to achieving the group SAFEX and a member of the SAFEX Global Head of Mining Services was elected Security Sensitive Ammonium Nitrate Ammonium Nitrate industry working group. to the WCA Board in 2013. The WCA (SSAN) Principles – Orica’s ammonium Orica is active in regional explosives safety is an industry group that has represented nitrate prill and all emulsion products are organisations, among them the Australian the global coal industry since 1985, playing designated as security sensitive ammonium Explosives Industry and Safety Group (AEISG), a key role in influencing the international nitrate (SSAN) and are subject to Council of the Institute of Makers of Explosives in the direction of the coal industry, one of Orica’s Australian Governments (COAG) Principles United States, the Federation of European key customers. and legislative requirements. Orica supports Explosives Manufacturers and the Canadian • Australian Industry Associations – Orica the mining and construction sectors taking Explosives Safety Group. Orica is also active is a member of: the Plastics and Chemicals a leadership role in diligently managing the in the National Fire Protection Association Industries Association (PACIA) (Orica‘s handling and storage of SSAN. (AN Working Group), and the US and Australian operations are signatories of Canadian Fertiliser institutes. Internationally, PACIA’s Sustainability Leadership Framework);

31 The Sustainability Report 2013 GOVERNANCE AND ECONOMIC CONTRIBUTIONS

Governance

Orica’s directors and management Board Composition and Independence Company. It is aimed at ensuring the Company’s are committed to conducting the The primary role of the Orica Limited Board is business is conducted with integrity and in Company’s business ethically and the protection and enhancement of long-term an environment of openness. Orica’s Code of shareholder value. Orica considers the successful Conduct is communicated to employees when in accordance with the highest management of safety, health and environment they join the Company and is available at standards of corporate governance. matters as vital, and a Safety, Health and www.orica.com Environment (SHE) Committee assists the Board Bribery and Corruption Prevention in the effective discharge of its responsibilities in In addition to the Code of Conduct, Orica has this area. Read more in the 2013 Orica Limited a number of procedures relating to appropriate Annual Report at www.orica.com standards of conduct by employees, contractors Mechanisms for Employee and Shareholder and service providers. These including Communication requirements relating to bribery, corruption, The Board encourages full participation of financial inducements, facilitation payments, shareholders at the Annual General Meeting conflicts of interest, gifting, hospitality and (AGM) where important issues are presented entertainment. The Company conducts to the shareholders as individual resolutions. awareness and training programs in relation Employees can also be heard via the Orica Speak to the Code of Conduct and its associated Up Line and by providing feedback following procedures. Internal control systems are in place Seven Pillars training. to monitor adherence to the Code of Conduct.

Performance Evaluation and Remuneration Political contributions and activities Orica has a range of processes in place to Orica does not contribute funds to any political evaluate the performance of the Board, Board party or candidate for election. committees and executives. Read more in the 2013 Orica Limited Annual Report at Orica’s Speak Up Line www.orica.com The Orica Speak Up Line is an outsourced independent service, developed to provide Risk Management employees with an opportunity to anonymously Orica aims to maintain a consistent and report suspected breaches of the Code of effective organisation-wide approach to Conduct within the organisation by phone the management of risk aligned with the or email. If a report is made, it is escalated as principles of ISO 31000:2009. This includes appropriate for investigation and action. regular reporting of relevant risks to Company management and the Board. The Company has In 2013, the Speak Up Line received 98 reported integrated risk management processes covering incidents, compared to 100 in 2012. The most all aspects of business activity and the entire common incidents reported were general life cycle of Orica’s products, projects and misconduct (52), bullying/harassment (32), and services. Read more in the 2013 Orica Limited safety breaches (6). Twenty-five of the reported Annual Report at www.orica.com incidents resulted in action being taken towards employees involved. By region, 34 percent of Code of Conduct reports were received from the Australia Pacific Orica’s Code of Conduct applies in all countries region, 27 percent from North America, in which Orica operates. The Code of Conduct 14 percent from Europe/Middle East/Africa, sets out the standards of business conduct 12 percent from Latin America, 11 percent from required of all employees and contractors of the Asia, and two percent were not specified.

32 Orica aims to deliver value to shareholders and support local economies in a socially responsible manner. Orica sees its social responsibilities as being complementary to its financial performance, and a critical component of the Company’s licence to operate in all regions of the world and its ability to attract and retain the best employees.

Economic Contribution

Economic Value Generated Economic Value 2013 (A$M) Definition and Distributed Orica’s economic value generated and distributed in 2013 is detailed Direct Economic Value Generated in the table to the left:

Revenue 7,694.6 Receipts from customers plus revenues from financial investments and sales of assets $7,694.6M Receipts from customers plus revenues from Economic Value Distributed financial investments and sales of assets Operating costs 5,077.1 Payments to suppliers and employees, excluding employee benefits expenses Employee wages and benefits 1,230.6 Employee benefits expenses $1,230.6M Employee benefits expenses

Payments to providers of capital 153.3 Net interest paid

Payments to government 141.8 Net income taxes paid

Read more about Orica’s Community investments 1.4 Voluntary community investments financial performance in and contributions, including donations the 2013 Annual Report at www.orica.com

33 The Sustainability Report 2013 GOVERNANCE AND ECONOMIC CONTRIBUTIONS Continued

Economic Contribution

Indirect Economic Impact Orica also indirectly supports the local and regional economies where it operates. The Company implements leading practice technology options when establishing new sites. Orica is committed to engaging local employees, contractors and business partners where possible. Indonesia Orica’s ammonium nitrate complex in Bontang, East Kalimantan, Indonesia is now in operation at nameplate capacity. The plant was constructed by an Indonesian contracting company which was also involved in the detailed design of certain sections of the plant. Local people were employed throughout the project. The plant now has 160 Indonesian and three expatriate employees. Where feasible, the contracting of services for the site has been made with companies local to Bontang. The company has an active social responsibility program that aids local communities with their children’s education and development of their communal facilities. This has led to Orica Brazil partnering with Orica runs specific financial models of cost/ China local education providers to implement their revenue outcomes for abatement opportunities A similar approach was applied to the Programa Sem Fronteiras (Without Borders and marketing plans to customers that construction of Orica’s initiating systems joint Program). Run by volunteers from Orica’s Lorena incorporate greenhouse gas-related business venture (with Nanling) located in Hunan plant, classes are held to teach participants basic opportunities. Contracts and expenditure province, China. The facility is awaiting final administrative skills, enabling them to become proposals that meet certain threshold criteria statutory approvals and is expected to ramp strong candidates for employment in their local must include a sustainability statement, while up capacity over the coming year, employing communities. In 2013 the focus has been on sustainability impacts are considered as part approximately 155 local personnel (an increase continued learning for those participants who of the approval process for major projects. have been employed by Orica. from the current 101). As a result, considerable Emissions Reporting in Australia effort was put into training and development Climate Change Implications Orica operates three emissions-intensive trade- of operations personnel. Landscaping and Climate change implications are assessed by exposed (EITE) activities in Australia for the minor rectification works were undertaken reviewing the Company’s emissions profile, the production of: cooperatively utilising local contractors. During current and anticipated regulatory frameworks • ammonia at Kooragang Island, New South the commissioning phase, local communities in the countries of operation, and the likely Wales; provided accommodation for international impacts of those regulatory frameworks. staff in local hotels and also benefited from • ammonium nitrate at Kooragang Island and Yarwun, Queensland; and purchasing of commissioning consumables. Risks and opportunities that may be related to climate change considered by Orica include: • chlorine gas and sodium hydroxide solution at India Botany, New South Wales, Laverton, Victoria In Gomia, India, Orica’s initiating systems • regulatory impacts and opportunities, and Yarwun. operation is integral to the local community. including the Australian Government’s Jobs With 50 years of operation, the site has and Competitiveness Program (JCP), the Clean Orica received 2,615,972 units of free permits contributed extensively to housing, schools, Development Mechanism, the Australian for EITE activities carried out during the 2013 medical facilities and improved water access Energy Efficiency Opportunities (EEO) Australian financial year. Orica reports its in the local community. program; energy consumption, energy production and • the role of new technology in reducing greenhouse gas emissions under the Australian Read the about Orica’s contribution to Gomia emissions. Read more on pages 9 and 22 Government’s National Greenhouse and Energy hospital on page 20 of this report. of this Report; Reporting Act 2007. An independent reasonable Brazil • products and services that minimise carbon assurance report was provided with the In Brazil, it is mandated by law that two emissions for mining customers. Read more Company’s 2013 submissions. Read more about percent of all employees are disabled on page 8 of this Report; and Orica’s energy and greenhouse gas emissions citizens. Unfortunately, there is a gap in basic profile on pages 22 to 24 of this Report. • pricing of raw materials, including qualifications required for employment. energy inputs.

34 About the Report 2013

Data definitions, corrections Data Accuracy and Verification Report Scope and restatement Independent verification has not been sought Information and statistics in this Report cover for the information contained in this Report, sites owned and operated by Orica Limited Incident Severity Categorisation with the exception of financial information, subsidiaries or controlled by Orica Limited This Report includes reporting of “Category which is drawn from the 2013 Annual Report. subsidiaries during the 12 month period. 2+ incidents” – a measure used by Orica to Data is reported on a 100 percent basis for While every effort has been made to ensure categorise significant incidents. These may facilities operated by Orica Limited subsidiaries the accuracy of the information, anyone include events which cause actual or potential, irrespective of equity share, unless otherwise seeking to rely on information in this Report significant injury or damage, or concern in the stated. Joint venture projects that are not or seeking to draw conclusions from the surrounding community or attracts local media operated by Orica are excluded unless expressly data should not do so before contacting attention. Examples may include a recordable stated. Data for energy, greenhouse gas the Company for verification and assistance. injury, a spill to the surrounding environment, emissions, water and waste is only reported Questions regarding the Report or its contents certain gaseous emissions, a fire that causes for operations owned and operated wholly by may be directed to the Company by email significant damage to equipment, or a loss Orica Limited subsidiaries, with the exception ([email protected]) or via the or spill of product during transportation of the Bontang Indonesia joint venture, which contact details on the back cover of this Report. to a customer. is included due to Orica’s operational control Reporting of Greenhouse Gas Emissions of the facility and its significant emissions profile. Orica reports greenhouse gas emissions, energy consumption and energy production from the Company’s Australian facilities under the Australian Government’s National Greenhouse and Energy Reporting Act 2007 and appropriate guidelines. Greenhouse gas emissions from the Company’s non-Australian sites are reported using the same general framework, with the application of local energy and emission factors. The reporting of non-Australian data is based on materiality thresholds. Changes to Data Reported in the 2012 Sustainability Report Reported greenhouse gas emissions for the years 2009 to 2012 have been changed to reflect a revised method to calculate nitrous oxide emissions at Orica’s Australian nitric acid plants, based on recently installed in-line monitoring equipment. As process emissions from nitric acid production forms a large percentage of Orica’s greenhouse gas profile, the outcome of this recasting has been an increase in the reported overall Company Scope 1 emission result of around 6 percent. The updating of the 2010 greenhouse gas result also alters the baseline for the 2015 target of reducing greenhouse gas emissions by 50 percent per tonne of production.

35 The Sustainability Report 2013 GRI SUMMARY INDEX

Global Reporting Initiative (GRI) Summary Index

Orica’s 2013 Sustainability Report has been prepared in accordance with the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines, Version 3.1. The following table summarises Orica’s performance against the GRI Guidelines. See Orica’s full 2013 GRI Content Index at orica.com/sustainability.

GRI Standard Disclosure Indicator Reported Page Reference

Statement from the most senior decision-maker of the organisation 1.1 Fully Message from the Managing Director and CEO Description of key impacts, risks, and opportunities 1.2 Fully Sustainability Performance Scorecard, Governance (Risk Management) Organisational Profile 2.1 – 2.10 Fully Visions and values, Recognition, Locations and Operations Report Parameters 3.1 – 3.13 Fully About this Report, Data definitions, corrections and restatements Governance, Commitments and Engagement 4.1 – 4.17 Fully Governance, Product Stewardship (Participation and Commitments), Engagement and Key Sustainability Issues

Disclosure on Management Approach Economic Aspects Fully Economic Contribution Environment Aspects Fully Environment, Product Stewardship Labour Practices Aspects Fully People, Occupational Health Human Rights Aspects Fully People, Economic Contribution (Indirect Economic Impact) Society Aspects Fully Community, Governance Product Responsibilty Aspects Fully Product Stewardship

Economy Direct economic value generated and distributed, including revenues, EC1 Fully Economic Contribution (Economic Value operating costs, employee compensation, donations and other Generated and Distributed) community investments, retained earnings, and payments to capital providers and governments Financial implications and other risks and opportunities for the EC2 Fully Economic Contribution (Climate Change organisation’s activities due to climate change Implications) Understanding and describing significant indirect economic impacts, EC9 Partially Economic Contribution (Indirect Economic including the extent of impacts Impact)

Environment Direct energy consumption by primary energy source EN3 Fully Environment (Energy use) Indirect energy consumption by primary source EN4 Fully Environment (Energy use) Energy saved due to conservation and efficiency improvements EN5 Partially Environment (Energy use) Total water withdrawal by source EN8 Fully Environment (Water management) Total direct and indirect greenhouse gas emissions by weight EN16 Fully Environment (Greenhouse gas emissions) Other relevant indirect greenhouse gas emissions by weight EN17 Fully Environment (Greenhouse gas emissions) Initiatives to reduce greenhouse gas emissions and reductions achieved EN18 Fully Environment (Greenhouse gas emissions) NOx, SOx, and other significant air emissions by type and weight EN20 Fully Environment (Emissions) Total weight of waste by type and disposal method EN22 Fully Environment (Waste management) Total number and volume of significant spills EN23 Fully Environment (Emissions) Initiatives to mitigate environmental impacts of products and services, EN26 Fully Product Stewardship, Sustainable Gains and extent of impact mitigation Through Higher Energy Bulk Explosives, Mineral Carbonation Pilot Plant

36 GRI Standard Disclosure Indicator Reported Page Reference

Monetary value of significant fines and total number of non-monetary EN28 Fully Environment (Compliance) sanctions for non-compliance with environmental laws and regulations

Social: Labour Practices and Decent Work Total workforce by employment type, employment contract, and LA1 Fully People (Global Team, Global Skills) region, broken down by gender Total number and rate of new employee hires and employee turnover LA2 Partially People (Global Team, Global Skills) by age group, gender, and region Benefits provided to full-time employees that are not provided to LA3 Partially People (Building Competence Through Investing temporary or part-time employees, by major operations in Training and Development) Return to work and retention rates after parental leave, by gender LA15 Partially People (A Diverse Team) Percentage of employees covered by collective bargaining agreements LA4 Fully People (Protecting Employee’s Workplace Rights) Minimum notice period(s) regarding significant operational changes, LA5 Fully People (Protecting Employee’s Workplace Rights) including whether it is specified in collective agreements Percentage of total workforce represented in formal joint LA6 Fully People (Protecting Employee’s Workplace Rights) management-worker health and safety committees that help monitor and advise on occupational health and safety programs Rates of injury, occupational diseases, lost days, and absenteeism, and LA7 Partially Safety (Personal Safety, Injuries and Illnesses) number of work-related fatalities by region and by gender Education, training, counseling, prevention, and risk-control programs LA8 Fully Occupational Health in place to assist workforce members, their families, or community members regarding serious diseases Programs for skills management and lifelong learning that support the LA11 Partially People (Building Competence Through Investing continued employability of employees and assist them in managing in Training and Development) career endings Percentage of employees receiving regular performance and career LA12 Partially People (Building Competence Through Investing development reviews, by gender in Training and Development) Composition of governance bodies and breakdown of employees per LA13 Partially People (A Diverse Team) employee category according to gender, age group, minority group membership, and other indicators of diversity Ratio of basic salary and remuneration of women to men by employee LA14 Partially People (A Diverse Team) category, by significant locations of operation

Social: Human Rights Total number of incidents of discrimination and actions taken HR4 Fully People (Protecting Employee’s Workplace Rights)

Social: Society Percentage of operations with implemented local community SO1 Fully Community (Stakeholder Engagement) engagement, impact assessments, and development programs Public policy positions and participation in public policy development SO5 Fully Governance (Political contributions and activities) and lobbying Total value of financial and in-kind contributions to political parties, SO6 Fully Governance (Political contributions and activities) politicians, and related institutions by country Monetary value of significant fines and total number of non-monetary SO8 Partially Environment (Compliance) sanctions for non-compliance with laws and regulations

Social: Product Responsibility Life cycle stages in which health and safety impacts of products and PR1 Fully Product Stewardship services are assessed for improvement, and percentage of significant products and services categories subject to such procedures Type of product and service information required by procedures, PR3 Fully Product Stewardship (Safety Data Sheets) and percentage of significant products and services subject to such information requirements

37 Orica Limited Telephone: Cover: Revive Pure Silk 100% Recycled is ABN 24 004 145 868 +61 3 9665 7111 certified carbon neutral and FSC 100% Recycled certified. It is manufactured process chlorine Head Office: Facsimile: free (PCF) by an ISO 14001 certified mill. 1 Nicholson Street +61 3 9665 7937 East Melbourne Text: Revive Laser is 100% Recycled, and Email: Victoria 3002 is manufactured from FSC Recycled certified [email protected] Australia fibre. Certified Carbon Neutral by the DCC&EE Web: under the National Carbon Offset Standard Postal Address: www.orica.com (NCOS), Revive Laser also supports Landcare GPO Box 4311 Australia. Made in Australia by an ISO 14001 Melbourne certified mill. No chlorine bleaching occurs in Victoria 3001 the recycling process.